With Fannie Mae's $1 billion HouseOakland community lending venture under way, organization officials will now use Oakland, Calif., as a "laboratory" to research, develop and fine-tune their program for use as a model with other U.S. central cities that are lining up to follow the Bay city's lead.
The project, which has attracted several U.S. central cities now negotiating similar plans with Fannie Mae, pools all of Fannie's affordable lending programs, as well as a few Oakland-unique programs, to help finance the purchase, construction or rehabilitation of more than 10,000 units of single-family and multifamily housing for Oakland's low-, moderate- and middle-income families over the next five years.
"[HouseOakland] is a laboratory that will allow us to develop products and approaches that will be used in other participating cities," said Martin Devine, Fannie Mae senior vice president for low- and moderate-income housing. "We hope what we learn from Oakland can be disseminated into other communities and can have a greater impact in them."
One of the first things Fannie Mae is learning about this new venture in community lending projects, Devine said, is how to manipulate the available programs to fit the particular needs of the city.
"Oakland's case is special in that it has a lot of its housing over 100 years old," Devine said. "And most of it is in poor physical shape. So there's a major interest there in housing rehabilitation. We're working with the city to use our existing housing rehab programs and apply them to Oakland's unique circumstances."
As a test ground for the rest of the nation's central cities, Devine said a lot will ride on HouseOakland's success. If the project flourishes, it may open a floodgate of requests from interested metropolitan areas - many are already calling. But for now, Fannie Mae is playing coy toward many of those requests.
"Oakland is the first of about a half dozen cities [which will participate] over the course of the next year," Devine said. "The commitment of time and effort will be such that we'll want to keep our first list limited in scope so we can do a first-rate job with the partners we're picking.
"We'll judge our progress by the number of people we're housing," Devine said. "We're also have reports on how many projects we've financed, including breakdowns in standard business, special community lending, rehabilitation and multifamily loans we've made.
"At one level, our measure of success will be the number of families we're helping. At another, it'll be the impact on targeted neighborhoods, quality of life and the overall revitalization of those communities. We hope to be able to come up with a measure we can look at quantitatively - whether it's dwelling units in those neighborhoods, reductions in the numbers of vacancies or property values. We'll try to get neighborhood-based measures, in addition to measuring the number of families, that'll be the most direct way of tracking it."
Beyond the HouseOakland's obvious intent of increasing homeownership, it also is the first significant step toward getting Fannie Mae within the 30/30 goals set by Congress last year. Those goals car for Fannie Mae and Freddie Mac to ensure that 30% of the loans they purchase are for low- and moderate-income housing, while another 30% goes toward housing in central cities. To reach those goals, Devine said Fannie Mae still "had a way to go" but feels it will reach them shortly. Freddie Mac has lobbied for more time.